Hu Human Ri Rights Im Impact As Asses essmen ents Thursday, May 28 th , 2020
Spe Speakers Tulika Bansal Signe Andreasen Lysgaard Senior Adviser Strategic Adviser Human Rights and Business Human Rights and Business Department Department Danish Institute for Human Rights Danish Institute for Human Rights Mary Beth Gallagher Executive Director Investor Advocates for Social Justice
Investor Engagement on Human Rights Impact Assessments IAHR Webinar – May 28, 2020 Mary Beth Gallagher, Executive Director, Investor Advocates for Social Justice (IASJ) mbgallagher@iasj.org
Why engage companies on Human Rights Impact Assessment (HRIA)? • 1. HRIAs help companies identify their most salient human rights impacts, which helps them to prioritize efforts to address them and manage material risks. 2. Public disclosure of HRIA findings allow investors to evaluate companies’ human rights due diligence approach and assess a company’s progress over time. 3. Robust HRIA processes strengthen stakeholder engagement, can build trust, and help enable access to remedy for rights-holders .
Recent HRIA Engagements • When HRIA focus is appropriate • • IASJ Affiliates filed two shareholder proposals requesting HRIA in 2020: • Northrop Grumman Corporation • Vote outcome: 24.16% support • Weapons and defense technology company • Lear Corporation • Vote outcome: 44.76% support • Supplier of automotive seating & E-Systems
Northrop Grumman Corporation Weapons & defense company faces heightened risks in conflict-affected areas Resolved, Shareholders request that Northrop Grumman publish a report, at reasonable cost and omitting proprietary information, with the results of human rights impact assessments examining the actual and potential human rights impacts associated with high-risk products and services, including those in conflict-affected areas. Rationale for Support: • Investors are unable to assess how Northrop Grumman evaluates and mitigates risks accompanying specific activities such as weapons contracts, military training, biometrics, and emerging technologies, or with governments engaged in conflict. • Business relationships with the USG and governments whose activities may be linked to human rights violations may expose Northrop Grumman to legal, financial, and reputational risks. • In 2019, 31% of shareholders voted in favor of increased reporting on the implementation of the company’s Human Rights Policy.
Lear Corporation Automotive seating and electronics supplier with extensive global supply chain. Resolved, Shareholders request that Lear Corporation (Lear) publish a report, at reasonable cost and omitting proprietary information, with the results of a Human Rights Impact Assessment examining the actual and potential human rights impacts of the company’s high-risk business activities in its operations and value chain. Rationale for Support: • Lear does not assess or disclose its high-risk sourcing countries and commodities or its salient human rights risks, despite exposure to risks of child labor and forced labor in its leather and electronics supply chains. • Shareholders lack the disclosure required to evaluate the extent to which existing policies and practices contribute to effective human rights due diligence. Lear may face legal, reputational, competitive, and financial risks if the • company fails to manage human rights risks.
HUMAN RIGHTS IMPACT ASSESSMENTS - INVESTOR ALLIANCE FOR HUMAN RIGHTS WEBINAR Signe Andreasen Lysgaard & Tulika Bansal, Senior Advisers Human Rights and Business, Danish Institute for Human Rights
WHAT IS A HUMAN RIGHTS IMPACT ASSESSMENT? • A context specific process for identifying, understanding, assessing and addressing the adverse effects of a business project, activities or operations on the human rights enjoyment of impacted rights-holders such as workers, community members or consumers. • It is an elaborate assessment process. • Stand-alone exercise, but iterative follow up activities is essential to ensuring long term impacts. • HRIAs are on human rights , through human rights, for human rights.
HRIA AND HUMAN RIGHTS DUE DILIGENCE The UN Guiding Principles on Business and Human Rights (UNGPs) require assessment of human rights impacts – not necessarily a ‘human rights impact assessment’ Other types of • assessments and due diligence activities are also needed to comply with UNGPs Integrating elements of • HRIA methodology into other assessments and ESG activities can improve quality thereof and enable scalability
HRIA AS A DISCIPLINE IS INSPIRED BY ES(H)IA AND SIA PRACTICES Social Impact Assessments (SIAs): Tool to assess social impacts of a project • similarities: such as community engagement and impact mitigation • distinctions: human rights expertise / approach not guaranteed; SIAs uses a variety of benchmarks, it also looks at project benefits, and there is no explicit focus on rights-holders vs duty-bearers Environmental, Social & (Health) IAs: Tool to assess env., social & health impacts of a project • Legally required by national law for certain types of projects • Do not explicitly apply human rights and can overlook critical elements such as: 1. Labour issues in the supply chain 2. Post-conflict or conflict-sensitive areas 3. Security activities related to business operations and/or activities 4. Gender analysis and an assessment of the gender impacts 5. Rights of indigenous peoples & focus on vulnerable individuals/groups 6. Community impacts related to business relationships or activities 7. In-migration associated with the development of the business project 8. Legacy human rights impacts associated with the activities of previous business operators 9. Cumulative impacts, involving human rights impacts of other businesses
HRIA VS. AUDIT Social audits HRIAs Baseline Company policy / Code of Conduct and All human rights rights – Int. Bill of Human national laws (typically implicit select Rights human rights) Objective Compliance Preventing, mitigating and remediating potential and actual human rights impacts Procedure Audit protocol: management and Human rights based data-collection with worker input, verified by external audit affected stakeholders at the core company Scope Factory site - operational Varies. Can include project, site, value chain, supply chain and sector-wide Orientation Primarily internal Primarily external - affected stakeholders; NGOs, academics, trade unions, governments, business associations etc Data Emphasis on written documentation Primarily qualitative data collection – emphasis on experiences Output Internal audit report – corrective action Public HRIA report incl recommendations plan for actions at operational and systemic level
HRIAS IN SELECT INVESTOR / FINANCE FRAMEWORKS “In limited high risk circumstances, it may be appropriate for the • client to complement its environmental and social risks and impacts identification process with specific human rights due diligence as relevant to the particular business.” IFC performance standards (PS1, footnote 12) “The client is expected to include assessments of potential • adverse Human Rights impacts […] as part of the ESIA or other Assessment [...]. The client should refer to the UNGPs when assessing Human Rights risks and impacts” Equator Principles 4, p. 2 HRIAs highlighted as a useful to assessing companies • performance and included in sample shareholder resolutions on human rights. Investor Alliance Toolkit on Human Rights
DIFFERENT TYPES OF HUMAN RIGHTS IMPACT ASSESSMENTS Sector-Wide Integrated Stand-alone Collaborative Impact HRIAs HRIAs HRIAs Assessments Human rights Company–led integrated into HRIAs Environmental, Different ideas Social and/or around Health Impact Community-led collaborative Assessments HRIAs Looking at an HRIAs. entire business sector rather than Do not exist yet – a project could this be one Issue based HRIAs Specific topics of the ways integrated into forward? wider HRIAs (gender/child Product based rights) HRIAs
EXAMPLES OF HRIAS
WHAT DO HUMAN RIGHTS IMPACT ASSESSMENTS AIM TO ACHIEVE? Identification, avoidance and addressing of adverse • human rights impacts - change for people on the ground (rightsholders) Establishment of meaningful dialogue between • stakeholders in a particular context, including through developing joint ways forward Facilitating capacity building and learning of internal • and external stakeholders involved Enhancing transparency and accountability of the • business through documenting the impacts that have been identified and actions taken to address these Empowering rights-holders to hold business to • account for adverse human rights impacts
Recommend
More recommend
